Customer Service Outsourcing Pros and Cons: An Analysis
According to a recent Deloitte survey, 59% of US businesses outsource customer service to cut costs.
That’s right. The majority of businesses hire outside experts to handle calls, reply to emails, and run social media messages externally.
But like any business move, outsourcing has its pros and cons. On one hand, you can save some serious cash, tap into expert knowledge, and level up your service game.
On the other hand, it’s easy to delegate customer service to the wrong team or person. This can lead to language barriers, data leaks, and damage to your brand perception.
So, before you take the plunge on outsourcing customer service, carefully weigh these pros and cons… Then make a decision based on what’s best for your business.
What is Outsourcing Customer Service?
Outsourcing customer service is delegating customer service operations to a third-party service provider. Doing this can help manage customer inquiries and complaints, address high demand, and reduce costs.
But what makes customer service so important?
What is customer service?
Customer service is the backbone of a successful and sustainable business. According to Salesforce, 91% of customers are more likely to make another purchase after a great service experience.
When you have a top-notch customer service team, success becomes even more achievable. It shows how much a company cares about its customers. And it can seriously affect a company's reputation and future success.
Excellent customer service can also help your business:
- Increase Brand Loyalty: Exceptional customer service can transform initial buyers into devoted, brand-committed loyalists.
- Retain Existing Customers: Did you know it’s easier to retain customers than gain new ones? Moreover, it can cost more to attract new customers.
- Get Referrals: Customers who are happy with your service tend to recommend it to others. It’s a free advertisement that you should take advantage of.
- Stand-Out Among Competitors: In today’s digital age, it’s easy to get reviews on who gives great services and those who don’t. Watch how you stand out because of exceptional service.
The role of a customer service representative
Customer service representatives are a company’s frontline workers. They are the ones customers interact with most, making them the face and voice of the business.
Apart from taking calls, they have a list of tasks and responsibilities.
Customer service isn't just about everyday tasks; they create exceptional customer experiences. Moreover, they are vital in shaping a company's reputation, building customer loyalty, and ensuring customer happiness.
When should you consider customer service outsourcing?
Outsourcing customer service takes many forms. You can partner with specialized call centers or BPO companies. You can also hire a customer service staff to add to your team. But the decision will depend on various factors like the nature of your business, the level of expertise you need, and your company's long-term goals.
Outsourcing is the way to go if you want to optimize your customer support operations. But before you jump the gun, take note of its advantages and disadvantages.
The Advantages of Customer Service Outsourcing
Picture this: improved efficiency, elevated customer satisfaction, and more time to tackle other critical aspects of your business. With outsourcing customer service, this is what you stand to gain.
Long-term cost savings
One of the primary advantages of outsourcing customer service is the cost savings it brings to your organization. In fact, almost 54% of all companies use third-party support teams to connect with their customers.
By outsourcing, you can reduce hiring, training, and managing staff expenses. The need for office space and equipment also lessens.
Increased efficiency
Outsourcing customer service can result in greater efficiency in your customer service operations. You can tap into the expertise and resources provided by your outsourcing partner. They have systems and technologies in place, creating a better customer experience. This will help free up you and your team to concentrate on other areas of your business.
Access to expertise
The need for specialized customer service continues to grow. Because of this, outsourcing companies in countries like the Philippines are evolving. You can now outsource customer service that understands your customers and your industry.
Improved customer satisfaction
Did you know that 46% of customers expect a response faster than 4 hours? Also, 12% want to get a reply within 15 minutes or less.
With a reliable outsourcing company, your customers are addressed promptly and professionally. After all, they have the tools and technologies to manage a high volume of customer inquiries.
Flexibility and scalability
Outsourcing customer service can help you manage changing customer demands. You won’t have to worry about recruiting, training, or restructuring internal teams. This flexibility can give you peace of mind and ensures your customers receive the best possible support.
Outsourcing customer service can be a strategic move in a world where customers expect quick responses and top-notch service. So, consider it as a way to provide the best possible support and keep your customers satisfied and loyal.
Disadvantages of Customer Service Outsourcing
Aside from the benefits, be mindful of the potential drawbacks of outsourcing customer service. While these are avoidable if you partner up with the right firm, it still pays to be informed of any possible scenarios you may encounter.
Costly upfront investment
While it's true that outsourcing can save you money over time, it can be expensive at first. This expense includes hiring an outsourcing company. In addition, you’re investing in their infrastructure and potentially training the staff to meet your business needs.
Some companies may struggle with the initial expenses, but there are possible long-term cost savings, making it all worth it.
Language barriers and cultural differences
Outsourcing customer service often means partnering with a company in a different country. And the primary language may not be the same as your customer’s. This can result in miscommunication and a negative experience. Cultural differences may also affect how a customer service representative handles a situation.
It’s easy to check the qualifications of your outsourcing partner. By doing your research, you can team up with a firm compatible with what you need.
Loss of control over operations and quality assurance procedures
When you outsource, you hand over control to a third-party provider. Your provider may have different methods and techniques for handling customer service.
This leads to inconsistencies and a lack of standardized procedures. It can also result in difficulty monitoring and maintaining service quality.
Veer away from this situation by laying everything down right from the start. Have both parties sign a service level agreement (SLA) to set the standards.
Poorly trained staff and low-quality support services
Not all outsourcing companies provide their employees with the necessary training and resources. This can lead to inadequate customer support, long wait times, and difficulty resolving customer issues.
Avoid this by collaborating with your outsourcing partner. Ask what they need in terms of documents and support. This way, you can ensure they have sufficient information to do the job right.
Lack of personalization and brand identity loss
Your third-party providers may not be as familiar with your product offerings, company culture, or customer base. This results in generic and less personalized support responses, weakening your brand's identity and connection with customers.
Conduct trainings, whether in person or online. Provide the necessary company information they need to keep your brand identity. You can also have a hand in crafting standard responses and the like.
Difficulties managing third-party providers
Managing third-party providers can be challenging. Communication, coordination, and oversight can become more complicated. And finding the right balance between involvement and autonomy can be difficult. Addressing any performance-related issues can also be a time-consuming and frustrating experience.
When you outsource, you also outsource the headaches that come with it. Consider these factors and discuss how to deal with them with your outsourcing partner. Remember, a successful outsourcing partnership starts with good communication and collaboration.
Something To Think About: Should You Outsource or Hire A Remote Staff?
Deciding between outsourcing customer service and hiring your own involves carefully considering various factors. While both options have their advantages, drawbacks, and similarities, it ultimately depends on your business needs, values, and resources.
Consider revisiting this before finalizing your decision:
The remote staffing advantage
Remote staffing goes beyond merely filling roles; it brings many advantages that can boost a company's growth and success.
Company culture
With a remote team, you can ensure your employees understand and embody your values. This creates a more consistent customer experience. It also leads to better product knowledge as your team becomes more familiar with your company’s branding.
Data security
Your team can provide greater control over sensitive customer information. But when you outsource, you share confidential information with external parties. Carefully check the security measures of your outsourcing provider to address these concerns.
Similarities in benefits
Your hired remote team can provide you with faster feedback. And like an outsourcing customer service company, a remote staffing firm can give you access to a large pool of skilled professionals. They can also reduce operational costs, increase efficiency, and provide time-zone advantages.
Another point to consider is its flexibility. As your business grows, adjusting the customer service representative handling workload may be required.
Scale up your operations when you partner with a remote staffing company like MultiplyMii. You don’t have to worry about additional office space or the process of recruiting new hires.
Find out your potential savings on new hires with our FREE salary guide.
The decision to outsource customer service or build a remote customer service team depends on your business model, resources, and values. Weigh the pros and cons and evaluate the impact of each option on your operations, customers, and bottom line.
How to Outsource Customer Service?
You already know you need to outsource. Now, let's get you started on doing it right!
We’ll walk you through the process, revealing the secrets to successful customer service outsourcing.
Step 1: Evaluate your business needs
Analyze factors such as:
- What is the volume of customer interactions?
- What are your customer’s time zones?
- How many support hours do you need?
- Should I consider remote staffing instead?
Answering these questions can help you assess if an external service provider or a remote staffing company can deliver the desired results.
Step 2: Research and more research
A thorough research is necessary when choosing a reliable firm to help you with your business requirements. Consider factors like:
- Experience and Capacity
- Industry Expertise
- Technology and Tools
- Communication Channels
- Customer Feedback, and References
Step 3: Request a proposal
Now that you have identified potential companies you can work with, request proposals and compare. This evaluation will help you narrow your choices and negotiate the best deal for you.
Step 4: Set clear communication and collaboration channels
Set up regular meetings to discuss performance, share feedback, and resolve issues. Keep an open line of communication. Encourage your chosen outsourcing firm to address any concerns or suggestions proactively.
Step 5: Provide adequate training and materials
Your customer service representatives must be trained about your company's policies, values, products, and services. Coordinate how you can do this with your outsourcing partner.
After all, nobody knows your brand like you do.
This will make sure your new team can provide a high-quality service experience to your customers.
Step 6: Track performance and set benchmarks
Frequent evaluations will help identify areas for improvement and adjust the operation as needed. This will help you get better service and, simultaneously, give the best customer service experience.
Unlock the potential of this game-changing strategy. By following these steps, you can start outsourcing your customer service operations.
Maintain Healthy Customer Relationships With A Skilled Customer Service Team
In today's fast-paced world, exceptional customer service is the cornerstone of any successful business.
That's why MultiplyMii provides you with top-notch remote staff who have the skills and commitment to maintain customer satisfaction.
We're not your typical remote staffing company – we're your partner in building lasting relationships with valued customers!
With a solid track record, we specialize in finding the perfect hires that align with your vision.
Let us match you with skilled professionals who will elevate your customer interactions, no matter where they're located!
Redefine customer engagement and boost your brand with the help of MultiplyMii.
Book a discovery call with us today!
Frequently Asked Questions:
How does outsourcing customer support impact the quality of service?
Outsourcing customer support can affect the quality of service in both positive and negative ways.
On the positive side, outsourcing can lead to cost savings, allowing businesses like yours to invest more in improving the quality of service.
Additionally, outsourcing companies often have specialized expertise that can benefit your business. However, challenges in communication, training, and cultural differences may negatively impact the quality of service.
To mitigate such risks, choosing a reputable outsourcing company committed to delivering high-quality service is essential.
Can outsourcing customer service lead to cost savings?
Yes, outsourcing customer service can lead to cost savings for businesses.
By outsourcing, you can often reduce hiring, training, and managing in-house staff expenses. At the same time, you benefit from the outsourced company's experience and expertise in delivering quality customer service.
Nonetheless, balancing these cost savings against any potential impact on the quality of service your customers receive is crucial.
What are the potential risks associated with outsourcing call centers?
Some potential risks associated with outsourcing call centers include:
- Challenges in quality control
- Communication barriers
- Data security concerns
- Customer dissatisfaction due to cultural differences or a lack of specialized knowledge.
Manage these risks by vetting outsourcing companies to ensure they align with your values and service standards.maintain regular communication to address any concerns as they arise.
How can small businesses benefit from outsourcing customer service?
For small businesses, outsourcing customer service can provide various advantages, such as cost savings, access to experienced customer support teams, and the ability to scale support quickly as their business grows. These benefits allow small companies to focus on their core offerings while ensuring their customers receive quality support from dedicated professionals.
What strategies can be implemented to overcome the disadvantages of outsourcing customer service?
Overcome the disadvantages of outsourcing customer service by establishing clear communication channels with the outsourcing company, setting performance metrics and monitors, and investing in regular training programs for outsourced agents.
Additionally, companies can take a hybrid approach by balancing in-house and outsourced customer service teams, ensuring quality control and maintaining a consistent brand image and customer experience.
